It seemed like a crazy idea. When Radiohead said it would release its new album, In Rainbows, as a pay-what-you-will digital download, you'd have thought the band had gone communist. After all, Thom Yorke and company are one of the world's most successful groups — a critical darling as well as a fan favorite for nearly 15 years. They hadn't put out a new album in more than four years, and the market was hungry for their next disc. So why would Radiohead conduct such a radical experiment?

It turns out the gambit was a savvy business move. In the first month, about a million fans downloaded In Rainbows. Roughly 40 percent of them paid for it, according to comScore, at an average of $6 each, netting the band nearly $3 million. Plus, since it owns the master recording (a first for the band), Radiohead was also able to license the album for a record label to distribute the old-fashioned way — on CD. In the US, it goes on sale January 1 through TBD Records/ATO Records Group.

While pay-what-you-will worked for Radiohead, though, it's hard to imagine the model paying off for Miley Cyrus — aka chart-topping teenybopper Hannah Montana. Cyrus' label, Walt Disney Records, will stick to selling CDs in Wal-Mart, thank you very much. But the truth is that Radiohead didn't intend In Rainbows to start a revolution. The experiment simply proves there is plenty of room for innovation in the music business — this is just one of many new paths. Wired asked David Byrne — a legendary innovator himself and the man who wrote the Talking Heads song "Radio Head" from which the group takes its name — to talk with Yorke about the In Rainbows distribution strategy and what others can learn from the experience.

Byrne: OK.

Yorke: [To assistant.] Shut the bloody door.

Byrne: Well, nice record, very nice record.

Yorke: Thank you. Wicked.

Byrne: [Laughs.]

Yorke: That's it, isn't it?

Byrne: That's it, we're done. [Laughs.] OK. I'll start by asking some of the business stuff. What you did with this record wasn't traditional, not even in the sense of sending advance copies out to the press and such.

Yorke: The way we termed it was "our leak date." Every record for the last four — including my solo record — has been leaked. So the idea was like, we'll leak it, then.

Byrne: Previously there'd be a release date, and advance copies would get sent to reviewers months ahead of that.

Yorke: Yeah, and then you'd ring up and say, "Did you like it? What did you think?" And it's three months in advance. And then it'd be, "Would you go do this for this magazine," and maybe this journalist has heard it. All these silly games.

Byrne: That's mainly about the charts, right? About gearing marketing and prerelease to the moment a record comes out so that — boom! — it goes into the charts.

Yorke: That's what major labels do, yeah. But it does us no good, because we don't cross over [to other fan bases]. The main thing was, there's all this bollocks [with the media]. We were trying to avoid that whole game of who gets in first with the reviews. These days there's so much paper to fill, or digital paper to fill, that whoever writes the first few things gets cut and pasted. Whoever gets their opinion in first has all that power. Especially for a band like ours, it's totally the luck of the draw whether that person is into us or not. It just seems wildly unfair, I think.

Byrne: So this bypasses all those reviewers and goes straight to the fans.

Yorke: In a way, yeah. And it was a thrill. We mastered it, and two days later it was on the site being, you know, preordered. That was just a really exciting few weeks to have that direct connection.

Byrne: And letting people choose their own price?

Yorke: That was [manager Chris Hufford's] idea. We all thought he was barmy. As we were putting up the site, we were still saying, "Are you sure about this?" But it was really good. It released us from something. It wasn't nihilistic, implying that the music's not worth anything at all. It was the total opposite. And people took it as it was meant. Maybe that's just people having a little faith in what we're doing.

Byrne: And that works for you guys. You have an audience ready. Like me — if I hear there's something new of yours out there, I'll just go and buy it without poking around about what the reviews say.

Yorke: Well, yeah. The only reason we could even get away with this, the only reason anyone even gives a shit, is the fact that we've gone through the whole mill of the business in the first place. It's not supposed to be a model for anything else. It was simply a response to a situation. We're out of contract. We have our own studio. We have this new server. What the hell else would we do? This was the obvious thing. But it only works for us because of where we are.

Byrne: What about bands that are just getting started?

Yorke: Well, first and foremost, you don't sign a huge record contract that strips you of all your digital rights, so that when you do sell something on iTunes you get absolutely zero. That would be the first priority. If you're an emerging artist, it must be frightening at the moment. Then again, I don't see a downside at all to big record companies not having access to new artists, because they have no idea what to do with them now anyway.

Byrne: It should be a load off their minds.

Yorke: Exactly.

Byrne: I've been asking myself: Why put together these things — CDs, albums? The answer I came up with is, well, sometimes it's artistically viable. It's not just a random collection of songs. Sometimes the songs have a common thread, even if it's not obvious or even conscious on the artists' part. Maybe it's just because everybody's thinking musically in the same way for those couple of months.

Yorke: Or years.

Byrne: However long it takes. And other times, there's an obvious…

Yorke: ... Purpose.

Byrne: Right. Probably the reason it's a little hard to break away from the album format completely is, if you're getting a band together in the studio, it makes financial sense to do more than one song at a time. And it makes more sense, if you're going to all the effort of performing and doing whatever else, if there's a kind of bundle.

Yorke: Yeah, but the other thing is what that bundle can make. The songs can amplify each other if you put them in the right order.

Byrne: Do you know, more or less, where your income comes from? For me, it's probably very little from actual music or record sales. I make a little bit on touring and probably the most from licensing stuff. Not for commercials — I license to films and television shows and that sort of thing.

Yorke: Right. We make some doing that.

Byrne: And for some people, the overhead for touring is really low, so they make a lot on that and don't worry about anything else.

Yorke: We always go into a tour saying, "This time, we're not going to spend the money. This time we're going to do it stripped down." And then it's, "Oh, but we do need this keyboard. And these lights." But at the moment we make money principally from touring. Which is hard for me to reconcile because I don't like all the energy consumption, the travel. It's an ecological disaster, traveling, touring.

Byrne: Well, there are the biodiesel buses and all that.

Yorke: Yeah, it depends where you get your biodiesel from. There are ways to minimize it. We did one of those carbon footprint things recently where they assessed the last period of touring we did and tried to work out where the biggest problems were. And it was obviously everybody traveling to the shows.

Byrne: Oh, you mean the audience.

Yorke: Yeah. Especially in the US. Everybody drives. So how the hell are we going to address that? The idea is that we play in municipal places with some transport system alternative to cars. And minimize flying equipment, shipping everything. We can't be shipped, though.

Byrne: [Laughs.]

Yorke: If you go on the Queen Mary or something, that's actually worse than flying. So flying is your only option.

Byrne: Are you making money on the download of In Rainbows?

Yorke: In terms of digital income, we've made more money out of this record than out of all the other Radiohead albums put together, forever — in terms of anything on the Net. And that's nuts. It's partly due to the fact that EMI wasn't giving us any money for digital sales. All the contracts signed in a certain era have none of that stuff.

Byrne: So when the album comes out as a physical CD in January, will you hire your own marketing firm?

Yorke: No. It starts to get a bit more traditional. When we first came up with the idea, we weren't going to do a normal physical CD at all. But after a while it was like, well, that's just snobbery. [Laughter.] A, that's asking for trouble, and B, it's snobbery. So now they're talking about putting it on the radio and that sort of thing. I guess that's normal.

Byrne: I've been thinking about how distribution and CDs and record shops and all that stuff are changing. But we're talking about music. What is music, what does music do for people? What do people get from it? What's it for? That's the thing that's being exchanged. Not all the other stuff. The other stuff is the shopping cart that holds some of it.

Yorke: It's a delivery service.

Byrne: But people will still pay to have that experience. You create a community with music, not just at concerts but by talking about it with your friends. By making a copy and handing it to your friends, you've established a relationship. The implication is that they're now obligated to give you something back.

Yorke: Yeah, yeah, yeah. I was just thinking while you were saying that: How does a record company get their hands on that? It makes me think of the No Logo book where Naomi Klein describes how the Nike people would pay guys to get down with the kids on the street. I know for a fact that major record labels do the same thing. But no one has ever explained to me exactly how. I mean, do they lurk around in the discussion boards and post "Have you heard the…"? Maybe they do. And then I was thinking about that Johnny Cash film, when Cash walks in and says, "I want to do a live record in a prison," and his label thinks he's bonkers. Yet at the same time, it was able to somehow understand what kids wanted and give it to him. Whereas now, I think there's a lack of understanding. It's not about who's ripping off whom, and it's not about legal injunctions, and it's not about DRM and all that sort of stuff. It's about whether the music affects you or not. And why would you worry about an artist or a company going after people copying their music if the music itself is not valued?

Byrne: You're valuing the delivery system as opposed to the relationship and the emotional thing...

Yorke: You're valuing the company or the interest of the artists rather than the music itself. I don't know. We've always been quite naive. We don't have any alternative to doing this. It's the only obvious thing to do.

The main thing was, there's all this bollocks [with the media]. We were trying to avoid that whole game of who gets in first with the reviews. These days there's so much paper to fill, or digital paper to fill, that whoever writes the first few things gets cut and pasted. Whoever gets their opinion in first has all that power. Especially for a band like ours, it's totally the luck of the draw whether that person is into us or not. It just seems wildly unfair, I think.